New Car Shortage! Real or Imagined?

Remember when Twinkies went extinct? There was a mass panic, and stores sold out immediately when news broke that the spongy yellow cake was about to be gone forever.

Fast forward to last weekend and I’m at a convenience store somewhere in the middle of Oregon, and there’s a stack of Twinkies at the cash register, with a label on the packaging that said something like, “Best comeback story ever.”

Right. Anyone else think the Twinkie panic was nothing more than a marketing ploy to sell more Twinkies?

I feel something similar might be happening in the auto industry at this very moment.

Suspicious that Accords would be flying off dealer lots faster than they can be built, I did a regional test and drove by a few dealers in my area. Apparently, my city is not affected by the WSJ‘s perception of production problems. Lines of Accords, Corollas, Fusions, Foresters and Impalas filled the lots of each dealer I checked out.

It got me wondering if automakers might publicize higher demand than reality in order to create a sense of urgency in buyers or as a way to justify higher prices. There’s no doubt the auto market is recovering, as August sales alone are expected to hit 1.4 million vehicles, but I just don’t buy into the fact that so many vehicles are in shortage.

If it’s true, expect used prices to rise, too, as buyers turn to the used market in place of buying new.

Remember at this time of year the manufacturers are changing inventory over to the next model year, so it’s no surprise that some new model year cars might be a little hard to find. For example, the Impala is just starting production so likely they aren’t even at full capacity yet. Not that I recommend buying an Impala though– Anyone who has suffered through one of GM’s new models will tell you that you should NEVER buy a GM in the first year of production. (and some in the second year either.) GM has a solidly earned reputation for low qualty model introductions.